Interferon-gamma (IFN-gamma) is an inflammatory lymphokine that has been implicated in the pathogenesis of several inflammatory diseases, including experimental autoimmune uveoretinitis (EAU). To study the possible role of IFN-gamma in ocular pathogenesis, we generated transgenic mice and rats with constitutive expression of IFN-gamma in the eye. We have extensively characterized both the rat and mouse IFN-gamma transgenic models, and they now constitute a comprehensive and complementary transgenic animal system for the study of the in vivo effects of IFN-gamma in the eye. In fiscal year 1995, our efforts were directed at understanding the molecular mechanisms underlying the remarkable effects of IFN-gamma on the development and growth of the entire eye. Our studies indicate that the primary effect is on transcription of several lens and nonlenticular genes. Two IFN-gamma-specific transcription factors, interferon consensus sequence binding protein (ICSBP) and interferon regulatory factor-1 (IRF-1), were found to be induced in the eyes of transgenic mice and rats but not in the eyes of wildtype litter mates.